AMP now seems to want to be a:
Bank
Investment company
Corp super provider
SMSF Services provider
Manufacturer of wealth management products
Admin platform provider
Adviser technology provider
It wants out of life insurance and it is now not clear how AMP will create value from having the largest adviser network in the country. No matter what AMP will get decreasing value from this network.
The only things in the industry that seem to make money are the bank, investment company, Corp super and wealth management products. And all but the bank has been heavily dependent upon the adviser network. It is hard to see how profit is not all downhill from here.
By buying AXA, AMP effectively doubled down on both wealth management and the value of advisers, as well as life insurance. The cost of AXA 7 years ago - some $4.5 billion - now represents 40% of the value of AMP. This has not been a successful acquisition. It is actually hard to follow the strategic intent behind it, other than AMP bulking up and pursuing a cost cutting based strategy as there were no other ideas. AMP could claim a bit of bad luck in terms of the direction the advice business regulation and community expectation has taken. But AMP do seem to be unlucky a lot.
Given all this, I think it is harder than normal to value AMP. The best way could be to value the parts but even then, what value do you put on a life business in this market? You could find you get more or you get half the valuation if forced to sell. On this basis, you would come up with numbers and a future as suggested by BarnArse.
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